Core operating earnings across the business fell by 45.8% to $204.9m in the first quarter of 2020. Coronavirus sliced $900m off sales and $200m from core operating income in the quarter, the company said in a press release.
'We experienced plant shutdowns in China beginning in late January that were followed by shutdowns of almost all our global operations beginning in mid- to late-March,' said CEO Ray Scott. 'Excluding the impact of coronavirus, Lear's results reflect solid financial performance in both of our business segments. While significant near-term challenges remain, I am confident in the strength of our underlying business, long-term competitive position and liquidity.'
The effects of coronavirus will hangover into the second quarter, said Scott, because automotive production will still be down.
Lear said that in the first quarter of 2020, global vehicle production was down 23% on the first quarter of 2019. Production in China was down 47%, Europe down 19% and North America down 10%, the company said.
To manage the economic fallout, Lear drew down $1 bn of its total available $1.75 bn in credit, suspended its share repurchasing programme, and issued $650m in new bonds. Lear also deferred non-plant employee salaries by 20%, reduced Scott's salary by 10%, and other executives' salaries by 5%.